Government shutdown complicates jobs report

John Flannagan, a U.S. Army veteran from West Deptford, fills out his resume for Lockheed Martin at Hiring Our Heroes - Philadelphia, a job fair for veterans Thursday November 7, 2013. More than 65 firms participated at the Linc. MICHAEL BRYANT / Staff Photographer

By Jane M. Von Bergen, Inquirer Staff Writer

Posted: November 10, 2013

Wall Street reacted positively to the Department of Labor's jobs report Friday, with the Dow Jones industrial average closing at an all-time high. The report, showing an increase of 212,000 private-sector jobs, was better than expected given the federal government shutdown in October.

"There was no impact from the shutdown," said Mark Zandi, chief economist with Moody's Analytics in West Chester. "I would have expected to see some of the shutdown's fingerprints on the report, and I didn't. I was surprised by that."

To Zandi, it points to an economy that is not booming but is resilient and can improve, as long as "lawmakers do no harm."

"The fact that the engine is still running given what we put it through is reason for optimism," he said.

But from Bart Ruff's vantage point, the jobs gained in October don't mean much for members of his support group for the unemployed.

"From our perspective, the job market is fine unless you are unemployed," said Ruff, chairman of My Career Transitions, which meets Saturday at Penn State Great Valley.

"Our numbers haven't gone down," he said, despite the steady upward trend in job numbers. "The jobs that are being created are not the jobs that are suitable" for My Career Transitions members, who tend to be white-collar.

The Labor Department's Friday report showed that the unemployment rate rose slightly, to 7.3 percent from 7.2 percent. Jobs were added in nearly all sectors, including construction and manufacturing. There was a decline in hiring in wholesale trade.

The Dow rose 167.80 points, or 1.1 percent, to close at 15,761.80 amid heavier-than-usual trading. Rising 23.46 points, or 1.3 percent, to 1,770.61 was the Standard & Poor's 500, which closed one point below its all-time high, set Oct. 29. The Nasdaq composite also rose, to 3,919.23, up 61.90 points or 1.6 percent.

The number of unemployed people remained about 11.3 million in October, but included 448,000 who reported being on temporary layoff. That figure would include federal employees sent home for 16 days in October.

Even though they have returned to work and are beginning to receive retroactive pay, "a lot of them are having a hard time because they live paycheck to paycheck," said Robert Klein, a South Jersey-based official with the American Federation of Government Employees, a union that represents many federal workers.

The federal shutdown complicated the compilation of jobs data as well as analysis. Data from the shutdown itself illustrated an underlying complication in the Labor Department's monthly report.

The report is based on two surveys - one of employers, including the federal government, talking about their payrolls, and the other of households, describing the current employment situations of individuals living in the home. Both surveys are based on information gathered in the week that includes the 12th day of the month.

In the household survey, some furloughed federal employees may have described themselves as unemployed - on temporary layoff, which would have been correct according to government definitions. But many, assuming that they would soon return to work, may not have considered themselves unemployed.

And, in the payroll survey, many furloughed federal employees were counted as employed because, even though they were absent from their jobs, they were still in a pay period that included the Oct. 12 week.

Overall, federal employment has declined in the last year by 94,000 jobs, as the sequestration has led to staffing cutbacks.

"These federal employees are walking around with targets on their backs," Klein said.

All together, federal employees were furloughed for a combined total of 6.6 million days, the White House reported Thursday. At the peak of the shutdown, 850,000 federal workers a day were out of work.

Staffing-company official Lewis Keel, territory vice president for Kelly Services' regional office in King of Prussia, said demand for workers - both temporary and full time - was slower in October than he had expected, adding that the volume doesn't seem to be picking up.

"Right now, there's apprehension, and without pointing fingers at either political party, the government shutdown had companies concerned," Keel said. There are also questions about how the Affordable Care Act will affect businesses.